Cyber Monday is Target's 'Super Bowl'

By midafternoon on Cyber Monday, after the lunchtime orders flood in online, the Target.com fulfillment center in Ontario likely will be buzzing with triple, possibly quadruple, the usual amount of action.

An expanded team of 80 workers is trained and at the ready for the annual marathon of sorting, packing and loading as many as 16 freight trailers at once.

“This is our Super Bowl,” said Melissa Montgomery, the red-and-khaki clad general manager of the cavernous, 750,000-square-foot warehouse packed with furniture, bicycles and baby gear stacked dozens of feet high.

Montgomery, along with senior group leader Todd Pickman, oversee part of a digital operation that has played a bigger role in Target's overall growth strategy in recent years. For them, the big day begins at 6 a.m.

Cyber Monday gets more hectic as the day goes on, and instead of halting shipments at 4:30 p.m., employees work until 6 p.m., and then resume fulfilling the wave of evening orders the next day at 5 a.m. “Tuesday is just as busy as Monday,” said Pickman, who started at Target 26 years ago loading trailers. “The big thing is to forecast workflow correctly, and plan for how many people we need.”

Last year, the Southern California online fulfillment center, along with the four others around the country dedicated to dot-com orders, shipped about a quarter of a million packages on Cyber Monday. In just the first six hours of the nation's biggest online shopping day, 1.2 million people visited Target.com.

The retailer's final holiday shopping ramp-up begins two to three weeks ahead of the Thanksgiving Day kickoff, with strategies designed to speed up processing times. Hot sale items like TVs are placed at multiple workstations around the warehouse, rather than along the same aisle, to make access easy. Inbound products are repackaged upon arrival to be ready for quick delivery.

“We prepare for the holiday season all year long. We're really invested ... in efficiency with technology,” Montgomery said.

Case in point: This year, the retailer added the CubiScan, a sophisticated machine that accurately and quickly measures specs of incoming boxes, and installed new rolling “tracks” to hurry boxes along the supply chain – on top of all the automated packing processes already in place.

“Orders have been increasing and we've been slammed, so we doubled the number of printers this year,” Pickman added.

Target spokesperson Matias Cavallin says the company's overall digital growth has doubled since last year, and 2013 has brought a number of e-commerce firsts, including weekly dot-com shoppable ads. (The Black Friday circular came out last Sunday.) This is in keeping with competitors like Walmart, and even off-price retailers like T.J. Maxx, which are investing in e-commerce and pushing discounts and merchandise offerings that were obtainable only in-store until earlier this year.

Streamlining the front-end also is important, and Target is one of the many big retailers working with SOASTA, a Northern California tech company that performs cloud-based user-experience testing on websites and apps.

“Cyber Monday is not a sprint, it's an IT ultra-marathon,” said Tom Lounibos, CEO and cofounder of SOASTA. “Retailers recognize that online, consumers are three clicks away from buying someone else's product, and many of our clients began testing during the summer.”

If customers can't navigate a site easily, if the site goes down when there's too much traffic, businesses lose revenue, Lounibus said. He cited a Google survey that found every half-second delay caused a 20 percent decline in visitor traffic. Amazon has calculated that a page-load slowdown of 1 second could potentially cost $1.6 billion in annual losses.

Digital rules

Online retailers are especially bullish this season, expecting more consumers than ever to shop online.

Adobe, a software company that specializes in digital-marketing technology, predicts Cyber Monday 2013 sales will come in at $2.3 billion, up from last year's $1.98 billion. Investment firm Jefferies forecasts the amount of transactions during the 24-hour period will grow by at least 20 percent, breaking records for the fourth consecutive year. FedEx expects Cyber Monday shipments to increase 11 percent as online orders boost shipments past 22 million.

At the forefront of the e-tail bonanza is Amazon .com, which reported peak volume of 306 orders a second on Cyber Monday 2012. The Seattle-based company anticipates breaking that record this year by offering new deals every 10 minutes and has announced a Sunday delivery option with the Postal Service.

“Security isn't a concern anymore, nor if the product will get there on time,” said Scott Cohen, CEO of online marketing firm 180Fusion, one of Google's SEO partners. “There will be a lot of first-time shoppers on Cyber Monday, and our clients have increased their online advertising budgets by 35 percent (on average).”

Cohen's Southern California-based small-business clients, including natural-soap store econutssoaps.com and online hair boutique luxeremi.com, are offering 20 percent to 25 percent off storewide and started sales on Friday. He noted that in past years, 5 percent to 10 percent discounts were more common, and some sales are being extended into Tuesday.

Big on mobile

Target's growth in mobile specifically has tripled, and earlier this year, the company launched an integrated in-store couponing app called Cartwheel.

“It's back to responding to what our guests are asking for,” Cavallin said. “They want mobile coupons, in-store pickup and the ability to shop online.”

There's a lot at stake in mobile strategy, agreed David Chen, CEO of Strikingly, a freemium, self-service website builder that emphasizes mobile's importance. Strikingly, a startup out of prestigious Silicon Valley tech accelerator Y Combinator has helped smaller companies like Anaheim-based Bluetooth-headset company Deka Sounds create mobile-optimized websites, characterized by a one-page design that is visually guided and tells a curated story.

“In 2009, mobile was only one percent of total Internet traffic, but it's on track to overtake desktop traffic by next year,” Chen said. “When you talk about any business, if you don't focus on mobile traffic, you will lose all the younger generation of people who are trying to access your product.”

Shipping woes

Shipping is the other wrinkle e-tailers are trying to streamline. “Our goal is to figure out the fastest way to turn an 8 a.m. order into a 4:30 p.m. delivery,” Montgomery said.

Target hasn't announced its last day of standard shipping, but it usually falls in mid-December. This could pose a challenge, given that Accenture's holiday shopping survey reported that more than a quarter of holiday shoppers wait until December to start shopping -- 9 percent holding off until Dec. 15 or later.

“While Black Friday gets the majority of the headlines, for online retailers, Cyber Monday is key to winning the holiday season,” said Nathan Liu, cofounder and CEO of Scoutfit, a website that offers a one-stop shop for online deal hunters, including price tracking to coupon-code aggregation. Liu is a Yorba Linda native and a former vice president of e-commerce pricing and promotions at PacSun in Anaheim. “Underperformance on even one day could mean missing the forecast for the entire quarter,” he added.

Of course, that's all good news for online shoppers. “Sales have gotten crazier and crazier and we have no idea when to buy something,” said Lainie Herrera, Scoutfit's vice president of marketing. “Customers expect fast or free shipping and a discount.”